Half of All Exchange Server Deployments Will Involve SaaS Within Five Years

If you’re a Microsoft partner that’s skeptical about software as a service (SaaS), consider this: Half of all Exchange email inboxes will involve hosted systems within five years, notes Mary Jo Foley’s All About Microsoft blog. I’ve been alerting readers in recent weeks about Microsoft’s SaaS strategy for Exchange, Dynamics CRM and SharePoint. Ultimately, Microsoft will need to compete and cooperate with managed service providers (MSPs) that host those applications. Here’s how some Microsoft partners intend to cope with the software giant’s SaaS moves.

Many Microsoft-centric MSPs have started to acquire one another, in a bid to gain a larger regional footprint or technical know-how. Other MSPs are differentiating themselves by introducing security services for hosted Exchange systems. (Check out Azaleos as one prime example.)

Ultimately, however, I think basic, hosted Exchange Server solutions will become a commodity. MSPs will need to push into complementary areas — perhaps by melding hosted unified communications or CRM — or both — with Exchange.

Microsoft partners certainly seem to be heading for a new era — a time when they will need to increasingly compete with the software giant, especially as more mid-size businesses outsource their applications to MSPs and SaaS specialists.

Will Microsoft become the biggest MSP of all? In the Windows world, the answer is a firm “maybe.” But don’t forget: A hefty piece of the SaaS industry involves open source alternatives — Linux running MySQL, SugarCRM and so forth. There’s plenty of room for MSPs to compete and add value. But some VARs will surely get trampled by Microsoft along the way.